I have watched or listened to several successful entrepreneurs and drop out billionaires being interviewed. I have read several business books and studied the business success strategies of famous entrepreneurs; and they all seem to share one thing in common. They all attribute their rapid business growth to their business management team.
Now why is a business team important to an entrepreneur? Why should I build an in-house business management team when I can always seek external advice? What impact will a business team have on my business? I am running my business on a lean budget; why should I increase my overhead by bringing a business team on board?
These are usually the questions I receive when I discuss the importance of having a business team with my prot©g©s. You may be a small business owner operating a mom and pop shop but I still want you to know that you need a business team. It may not be your short term goal but you need to include it in your long term plan.
“Individuals don’t win in business; teams do.” – Sam Walton
No successful entrepreneur assembled a business management team in a day; it’s a process that can take as long as ten year before the perfect team assembles. Finding the right business team is definitely not an easy task and that’s why I listed it among the ten major business challenges entrepreneurs face when starting a business.
Now why do you need a business management team? Well, below are ten strategic reasons why you building a business team should be your long term goal.
Ten Strategic Reasons why You Need a Business Management Team
1. Raising Capital
One of the key reasons why startup entrepreneurs don’t get the venture capital is because they are trying to raise capital alone. A business mentor of mine once said that venture capitalist prefer an average product with an excellent business team than an excellent product with an average business team.
If you should consider this statement; you will come to acknowledge that it’s the truth in its entirety. A business team is vital to the process of raising capital for your business; in fact, it increases your chances of securing the capital. Show me an entrepreneur that raised billions of dollars in capital and I will show you an entrepreneur backed by a strong business management team. Just like said in the investment world; money always follow management.
2. Taking advantage of new or existing opportunities
Having your own business management team will give you the leverage to take advantage of business opportunities effortlessly. A business team will be your eyes, ears and nose in the business world; they will not only help you sniff out opportunities but will also help you create opportunities out of thin air.
“A business idea is just another idea. But an idea backed by a strong feasibility, a thorough business plan and a smart team is no longer an idea. It’s now a solid business opportunity worth pursuing.” – Ajaero Tony Martins
3. Strategic business development
Do you want to grow your business from the inside? Do you want to strengthen your bottom line? Then build your own business management team. Strategic business development is not the doing of an individual but a collective effort of a business team. Employee performance programs, staff motivation and operational excellence are part of the duty of a business team.
4. Rapid expansion and growth
Take a close look at companies that grows rapidly and stands strong in times of economic recess and you will find a strong business management team behind such companies. The massive outside expansion of any company is the handiwork of the business team. An entrepreneur visualizes while the business team draws the plan; critique the plan and executes the business plan. For instance, take a look at the rapid acquisition move taken by Oracle Corporation; buying up a total of 57 companies within five years. That’s the power of a good management driven company.
5. Business leverage
How is a company able to operate successfully in different sectors of the economy? How can an entrepreneur successfully run a business conglomerate? The answer is leverage.
“Successful businessmen share the ability to hire people smarter than they are.” – Dillard Munford
The leverage of a business team is the reason successful entrepreneurs became billionaires effortlessly. Leverage is the reason why entrepreneurs such as J. Paul Getty and Carlos Slim Helu are able to run over 200 companies without burning themselves out. The leverage of a business team is a form of intellectual leverage. Just as a man is known by the friends he keeps; so is a business respected by the management team it keeps.
“People are definitely a company’s greatest asset. It doesn’t make any difference whether the company’s product is cars or cosmetics. A company is only as good as the people it keeps.” – Mary Kay Ash
6. Increase confidence of the investors
Just like I stated above; money follows management and who provides the money? The answer is the investors. Nothing inspires or boosts the confidence of an investor than the professionalism of the business management team piloting the affairs of the company he/she invested in.
Have you tried raising capital before? Have you tried sourcing for contracts before? Have you tried sending a business proposal to another company before? Have you ever tried selling a business before? Or better still buying a business? Have you ever taken a company public before?
If you have engaged in any of these acts; you will come to accept the fact that one of the most popular questions investors ask is this:
Who is on your team?
Who on your team has taken a company public before?
Who on your team has experience in business management?
The questions above are real life questions asked by investors because they feel comfortable hearing the fact that the managers of their investments are competent.
7. Increase the entrepreneur’s credibility and competence
Observe the words of successful entrepreneurs and drop out billionaires carefully; and you will see that they attribute much of their success to their team. Have you ever wondered why some drop outs end up successful business owners? The reason is because they built their business on the shoulders of intellectual giants; who happen to be members of their business management team.
An entrepreneur can never know it all and that’s why he/she relies on the calculative initiative of the business team. Show me an entrepreneur backed by a weak business team and I will show you an incompetent entrepreneur. So if being recognized as an entrepreneur of credibility and competence sounds good enough to be added to your resume; then build your own in-house business management team.
8. Strategic innovative thinking
Innovative companies are usually companies driven by a strong management team. Observe companies such as Microsoft, Apple, Oracle and Sony; and you will come to realize that these companies have being built, driven and sustained competitively on innovation. Now who are the engineers of innovation? It’s the business team; the brains behind the company. Tactical approach to issues, detailed competitive analysis and strategic thinking are benefits derived from having your own business team; so would you rather not have one?
9. Critical problem solving
How does a company survives a recession? How does a company survive in a fierce market? The answer still lies in the team. In the previous article I wrote, I highlighted the characteristics of successful business management teams and one of such characteristics is critical problem solving.
Entrepreneurs are known as critical problem solvers but I also want to add that problem solving is a product of collective strategies and ideas put together by a group of individuals; and such individuals in this case is your business team. Critical problem so